Old Republic International has again surprised its owners with a special one-time dividend of $1,50 per share, payable to shareholders on October 6th 2021 with a ex-dividend date of 14th September 2021. For me this means an additional dividend of $105 gross dividend and $89,25 net of withholding tax.
This is good news for shareholders and my short-term dividend goal of 2 200€ per year. I am still behind on my dividend goal, however Old Republics additional dividend can boost my investments a bit to ensure I should achieve the goal 2022, well ahead of the set deadline 2025.
One challenge I find with the one-time special dividend from Old Republic is the challenge to find companies that pay a good dividend (dividend rate = dividend / stock price). For me it looks like the Board of Old Republic has the same issue, they see there is a challenge to find good investments and have therefore decided to distribute additional cash to shareholders. This is a very good practice from the Board and Managers, and I appreciate them for it. The way they work seems to be close to Warren Buffett's and Charlie Mungers principles, if you do not find good alternatives for your excess cash then distribute it to shareholders or buy back your share (Berkshire Hathaway has bought back B shares for some time now). There is a difference as Berkshire Hathaway had approximately 39 billion USD in cash and 102 billion USD in short term US treasury bills, equivalent to 141 billion USD in cash per 30th June 2021 (about 15% of total assets).
Now I face the challenge to find one or a few investments for the dividend, I do have some in mind which will show up in November once I update my portfolio. I will still follow my normal investment principle, by looking at my older posts you might figure out what I will do.
Overall good news for Old Republic International shareholders and hopefully the company can continue to delivery good returns in the future.
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